Hong Kong needs to attract a global talent pool, not just more Chinese
- Tensions may have made Hong Kong less attractive to Americans, British and Australians but there is still the rest of Europe and Asia
- To develop as a global business hub, Hong Kong needs to not have just diverse talent, but also stem the brain drain and encourage investments
As of mid-February, the Top Talent Pass Scheme, designed to attract foreign top earners or recent top graduates, has received 10,810 applications. Of these, half are recent graduates from the world’s top 100 universities and a sixth comprised high earners.
But two-thirds of the successful 7,700 applicants are from the mainland and up to 95 per cent of the rest are thought to be Chinese nationals living overseas.
As a special administrative region of China, Hong Kong naturally welcomes new talent who are Chinese citizens. They can create value for Hong Kong and the country, and are more likely to stay. But to strengthen the image of Hong Kong as a global business hub, the city needs to attract a more diverse pool of talent, especially when it has lost 20 per cent of its American population over the last two years.
Given the geopolitical tension between China and the United States, attracting American talent can be challenging. Hong Kong’s low income tax scheme is not a strong incentive because of the unique US tax law: all US citizens and residents have to pay individual income tax to the US government no matter where they live.
For many German professionals, Hong Kong holds appeal as a gateway to mainland China. For them and other Europeans, the city’s low income tax is also an economic incentive.
Hong Kong can also look towards the rest of Asia. It needs to rekindle the interest of Japanese talent to come work in Hong Kong, as they did in droves in the 1980s. Hong Kong, with its seemingly omnipresent Korean restaurants and Korean TV shows, can also make South Korean talent feel at home.
No better global talent than Hong Kong’s own overseas students
Finally, compared to the challenge of attracting a diverse pool of talent, ensuring that the local community embraces foreigners is much harder and more ground work is needed. Tensions between local and foreign talent are likely to emerge and must be managed carefully and proactively.
Hong Kong has the ability to attract and retain the foreign talent it needs to develop as a global business hub. But much more effort is needed to make it so.
Christopher Tang is a distinguished professor at the UCLA Anderson School of Management